The dispute between Pauline Chai, 67, and Khoo Kay Peng, 74, is now more likely to be settled in London. Photograph: Graham Turner for the Guardian

A £400m divorce battle between a Malaysian former beauty queen and her estranged husband, who own much of the Laura Ashley fashion business, is likely to be heard in Britain following a ruling by the Asian country's highest court.

The dispute between Pauline Chai, 67, and Khoo Kay Peng, 74, is now more likely to be settled in London where wives can expect far higher awards and a more equal division of family assets.

The case is the latest example of wealthy foreign litigants seeking to resolve high-value divorces in British rather than overseas courts.

The case, which has been running in parallel in the UK and Malaysian courts, has already been condemned by a British judge for its "eye-watering costs" of almost £2m.

Justice Holman questioned earlier this year "just how much time of an English court these parties should be able to take up on preliminary skirmishes, whilst squeezing out the many needy litigants who need precious court time to recover their children from abduction or seek their return from care, and other such issues".

But the federal court in Kuala Lumpur on Monday rejected the husband's attempt to have the case heard in Malaysia, clearing the way for a 10-day hearing at the high court in London in late September to assess whether it has jurisdiction in the case.

Khoo, who is said to be worth up to £400m, lives in the £30m Rossway Park estate near Berkhamsted, Hertfordshire. He and his wife own 40% of the Laura Ashley fashion business. The couple, who have five children, are not British citizens.

Ayesha Vardag, the divorce lawyer who represents Chai, said: "I am incredibly proud that the two highest courts in Malaysia have recognised the fundamental injustices associated with binding a wife to the domicile of her husband.

"This is a case where the wife has not lived in Malaysia for over 30 years. A law that therefore denies her the independence of a domicile of choice, and ties her to a country that she has long since left behind, is quite extraordinary.

"We are delighted that the Malaysian courts have recognised the importance of the issues of equality invoked by this case and the need for the question of our client's independent domicile to be fairly heard."

Khoo's lawyers have argued that the marriage took place in Malaysia and that Malaysian laws provide that the jurisdiction for any divorce proceeding is determined by the husband's domicile.